It could also, of course, continue the line of attacking the tax gap which I pretty much created for it from 2008 onwards with work for the TUC and other unions. It has worked; let’s not deny it. But as current research I am doing shows, that’s mostly because the constraints that politicians have put on themselves (balance the budget, constraint debt to GDP ratios, keep within EU 3% budget targets, etc) have over time meant that tackling the tax gap has been the only game left in town to a government that says it wants to increase spending, even if none of those constraints really exist.
Or it can blow the constraints away. It can say it is government spending that can create jobs in every constituency, as a Green New Deal would, and nothing else can. And it is government spending that can push up productivity when it looks like the private sector has run out of ideas on this issue. As well as the fact that government spending can build houses, transform our energy and transport systems, and so much more, all of which we could do if only we had the money.
And Labour should be bold. It should say we have the money. It’s ours to make. And if more tax is needed that will only be because there is more income to pay it from. And that’s a good thing.
At the same time Labour should make clear that those who will pay more tax are those who will make most – but they will still be better off because they always get more than their fair share of any boost to the economy. There is then no punishment planned: just fair recovery of the new wealth that Labour will liberate within an economy that is in the doldrums.
And I think people will buy that idea. In fact, I think that’s the sort of thing they are hoping for. A little red tinkering at the edges is not enough to inspire them to think Labour will change their lives. Who owns trains will not, ultimately, do that. Even NHS reform, passionate as I am to make sure the waste of faux markets is removed from it, will not be apparent to most people. That’s manifesto material for geeks. What matters are jobs, secure incomes, communities where people live, housing, good schools and secure old ages with an underpinning of comprehensive healthcare. Nothing but breaking the balanced budget constraint can deliver that.
Firstly, he argues that more spending will increase the tax take, so that we’d have a balanced budget. Then he tells us that only by ignoring a balanced budget can we have increased spending.
But the lovely bit is that all these things we want, we can only have them without a balanced budget. That is, they cost more than we’re willing to pay for them. That’s not exactly a rigorous proof that they’re worth having, is it?